Potential terror threat sparks likely law change

New Zealand's foreign intelligence agency will be able to spy on New Zealanders under legislation that is set to be introduced by the Government this week.

Prime Minister John Key is expected to announce details of the law change this afternoon if it is signed off by Cabinet.

Key cited the threat posed by ISIS and global terrorism when discussing the changes this morning.

"In a world of global terrorism where ISIS is trying to reach influence into a country like New Zealand, of course on a much lower scale than they do somewhere else, we can best defend ourselves by stopping that before it ever happens," Key said on TVNZ's Breakfast.

The law change will be informed by a recent, broad-sweeping review by Sir Michael Cullen and Dame Patsy Reddy, released in March with 107 recommendations and proposing a single piece of legislation to cover the intelligence and security agencies.

The most controversial recommendation was to allow the Government Communications Security Bureau (GCSB) to spy on New Zealanders, without requiring a warrant to do so, on behalf of other parties.

It breaks a longstanding split between the Security Intelligence Service (SIS) and GCSB under which the GCSB could only spy on foreigners and the SIS on New Zealanders.

Key this morning told Breakfast that under the new legislation the GCSB would be able to monitor New Zealanders but with strict safeguards.

"They'd need what's called a triple-lock warrant, so they need a warrant not only from the Commissioner and from the Minister [in charge of SIS and GCSB] but with review from the Inspector-General [of Intelligence and Security]."

The report by Sir Michael and Dame Patsy recommended that activity that is more intrusive or targets New Zealanders would need "Tier 1" authorisation.

That would require a warrant approved by the Attorney-General and a judicial commissioner.

It was recommended that the authorisation process could be overridden if there is an imminent threat to the life or safety of any person, or a delay in obtaining the information is likely to seriously prejudice national security.

The Chief Commissioner of Intelligence Warrants would be notified immediately in such cases, and the Attorney-General and Commissioner would consider an application after the fact, and order any intelligence to be destroyed if the application is declined.

The legislation covering the GCSB already allows it to spy on behalf of other agencies with a warrant that is approved by the Minister in Charge of SIS and GCSB.

However, in releasing his review Sir Michael said the GCSB had become hesitant to legally assist other agencies in such spying.

That happened after it was found to have unlawfully spied on more than 100 people because of confusion over its powers when acting on behalf of other agencies.

That could lead to valuable lines of investigation being dropped, and ultimately put New Zealanders' safety at risk, the report concluded.

"We are not proposing a vast extension of power ... it is a clarification ... the Government is, in effect, almost placed in a position of failing in its duty to protect the lives of New Zealanders, because the legislation is simply not clear enough," Sir Michael said at the launch of the report in March.

However, the recommendations have been strongly opposed by the Green Party, who say the proposals will result in a "culture of fear and spying".

And intelligence agency watchers say the new legislation will likely expand the agencies' powers.

Investigative journalist Nicky Hager has previously told the Herald that, without knowing how exactly any legislation would be worded, he suspected the move to free-up the GCSB to monitor New Zealanders was to clear away any barriers to the collection of Kiwis' metadata.